CITA announces safeguard proceedings against Chinese imports

The Committee for the Implementation of Textile Agreements announced that it would begin safeguard proceedings to determine whether textile and apparel imports from China threaten to disrupt the U.S. market.

The move came as the Commerce Department released numbers showing that imports of cotton and man-made fiber trousers from China jumped 1,521 percent in the first three months of 2005. Shipments of cotton knit shirts by Chinese manufacturers rose 1,257 percent.

The numbers were in line with claims by U.S. textile manufacturing and labor organizations that Chinese exports of textile and apparel products to the United States had literally exploded since worldwide textile import quotas expired on Jan. 1.

“This decision is the first step in a process to determine whether the U.S. market for these products is being disrupted and whether China is playing a role in that disruption,” said Commerce Secretary Carlos Gutierrez. “This administration is committed to enforcing our trade agreements and to providing assistance to our domestic textile and apparel industry consistent with our international rights and obligations.”

Committee for the Implementation of Textile Agreement officials said the proceedings would be aimed at cotton knit shirts and blouses (Category 338/339), cotton trousers (Category 347/348) and cotton and man-made fiber underwear (Category 352/652). (The numbers refer to the old textile import categories.)

CITA members said preliminary data for the first quarter of 2005 showed imports from China in those categories growing by 1,250 percent, 1,500 percent and 300 percent compared to the first quarter of 2004.

Textile manufacturing organizations, whose efforts to persuade the government to initiate safeguard provisions had been blocked by the courts, hailed the announcement.

“AMTAC is very pleased that the U.S. government has chosen to self-initiate safeguard investigations in these three crucial categories,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Tantillo, former director of the U.S. Office of Textile and Apparel in the first Bush administration, urged the government to undertake a thorough investigation of the import situation as quickly as possible.

AMTAC is also asking the government to render its decision on the safeguard cases shortly after the 30-day public comment period that CITA announced it would begin shortly is completed, Tantillo said.

“While the U.S. government can wait up to 60 days to render a decision after the (30-day) public comment period expires, it does have the power to make that decision the day of its closure. The U.S. textile industry cannot afford to wait 60 days for a decision — it needs relief on the soonest day allowed by the safeguard provision.

The safeguard proceedings, which are allowed under China’s 2001 accession agreement to the WTO, would limit any increase in Chinese imports in the three categories to 7.5 percent above the preceding year’s shipments.

The National Cotton Council, which has been supporting the textile industry’s attempt to implement the safeguard provisions, said the U.S. government’s actions are needed to prevent China from taking over the U.S. textile market.

“We commend the administration for this decisive action,” said Mark Lange, the Council’s CEO. “China has demonstrated in a number of trade categories its capability to dominate the U.S. market in a very short period of time. Self-initiation of textile safeguards is the only way that market disruption can be addressed timely and effectively.”

“This is certainly good news,” said NCC Chairman Woods Eastland. “It demonstrates the government’s commitment not only to improve its monitoring of textile imports, as was announced earlier, but to take responsible action based on that timely data to curb market disruption.”

A spokesman for the U.S. Association of Importers of Textiles and Apparel attempted to downplay the import numbers, saying many Chinese companies increased their shipments for January in anticipation of the quota expirations at the beginning of the year.

“I think, given this preliminary data, unless the administration is trying to be alarmist, they really need to also release some kind of analysis with the data as they do with the standard monthly statistics,” said Julia Hughes, vice president of international trade at the USA-ITA. “Clearly, no one should imagine there was any purpose to this release other than getting the data out faster to help the industry file safeguard petitions.”

AMTAC and other textile manufacturing organizations attempted to file so-called “threat-based” safeguard petitions to place caps on Chinese imports as the import quotas expired in January. But the USA-ITA sought an injunction blocking the CITA from considering the petitions.

The U.S. Court of International Trade in New York issued the requested injunction on Dec. 24. Administration attorneys filed an appeal of the ruling in February, but the federal appellate court denied the appeal in early March. Since then, textile manufacturers had been asking the administration to self-initiate the safeguard proceedings.

Tantillo said the three categories cited by CITA are not the only product groups that are being damaged by Chinese imports. “The U.S. textile industry will not wait long to file cases in additional categories where the facts merit filings,” said Tantillo.

Self-initiation also is an option for future filings of safeguard proceedings, said Karl Spilhaus, president of the National Textile Association. “That was the case when the chairman of CITA acknowledged in a letter to NTA in the fall of 2004 when NTA first formally requested the government to pursue this approach to controlling the flood of imports from China.”

At that time CITA declined to self-initiate, stating, in part, that industry had the option of filing threat-based cases. But since December 2004, threat-based petitions have not been acted on due to a court-imposed injunction, Spilhaus noted.

“The effective loss of our right to file threat-based petitions really focused us on the importance of the government self-initiating safeguards if we are to get any timely relief,” he said. “Of course, we’ll continue to file our industry cases based on actual disruption, but self-initiation, which can be a significantly streamlined procedure, is very welcomed by American textile manufacturers who are struggling against a flood of imports from China.”